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Robinhood S-1 IPO

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Re: Robinhood S-1 IPO

#351

Post by asdff »

stouset wrote: post #331
porb121 wrote: post #235

Earlier quoted context omitted.

You are literally required to get better fill prices than the market with PFOF. You aren't being played any more than if you just send a normal limit order to the market

Why—exactly—do you reason that someone is willing to pay $109 per user per year for their order flow? Put another way, Robinhood’s actual customers are confident that they are able to extract in excess of $109 in value each year they purchase the flow of orders from a given Robinhood user. From where and/or from whom do you suppose this money is being extracted?

>From where and/or from whom do you suppose this money is being extracted

My guess is from other funds that aren't privy to what horse the lemmings are betting on today and riding that wave.

Re: Robinhood S-1 IPO

#352

Post by [deleted] »

raziel2701 wrote: post #108
gberger wrote: post #75

The Chief Legal Officer, Daniel Gallagher, made $30M this year. It breaks down into $257k cash, $4.2M bonus and $25.5M in stocks and options. This is a far larger amount than any other executive. In 2011-2015, Daniel Gallagher was 1 of 5 Commissioners of the SEC (Securities and Exchange _Commission_), the highest role of the SEC, appointed by the US President. He was hired by Robinhood in May 2020, and his previous j…

So the Big Short was spot on when it showed the SEC lady using that position to leverage her way into a job in the sector she's supposed to regulate. It makes sense an SEC regulator knows all the ins and outs and would be the best person capable of finding and exploiting loopholes.

[deleted]

Re: Robinhood S-1 IPO

#353

Post by differentView »

daxaxelrod wrote: post #295
mherdeg wrote: post #239

Robinhood closed my brokerage account after I did transferred out assets (via ACATS transfer, to get a signup bonus with another brokerage without realizing capital gains). A few months later I asked how to reopen the account, using the "reopen account" form in their app to generate a support ticket. Three weeks later they sent an email saying that my account was permanently closed and I should apply for a new accoun…

Funny, same thing happened to me. https://imgur.com/a/8MDZHti I had to close my account for work. I left that company and wanted to open back up my robinhood account. Guess not

What do you mean you had to close your account for work?

Re: Robinhood S-1 IPO

#354

Post by bidirectional »

capitalsigma wrote: post #290
alasdair_ wrote: post #271

Earlier quoted context omitted.

Part of the problem is that Citadel had insight into the RH order flow before the rest of the market. Normally this wouldn’t matter but this also meant they get to see orders to buy GME went from to zero in an instant. Given their position on the other side of that trade, this advance warning (potentially) let them take that fact into account before anyone else and thus trade accordingly. RH stopping all GME purchase…

> RH stopping all GME purchases was market-moving news and citadel got to know before anyone else, to the detriment of those RH users that were long GME. Yes, that is the point of paying for order flow. That is doubtless why RH users don't pay commissions.

No it's not, payment for order flow allows market makers to fill non-market-moving customers at better prices, capturing the spread. You're spreading harmful misinformation.

Re: Robinhood S-1 IPO

#355

Post by bidirectional »

8note wrote: post #187
ditonal wrote: post #90

Earlier quoted context omitted.

Index funds democratized investing. Robinhood “democratized” the worst part of investing and exposed unsophisticated investors to the instruments they are most likely to underperform on. Individual stock picking is probably worse than indexes but fine, however the incentive to day trade or trade complex derivatives is almost certainly going to hurt people far more often than a Vanguard account. It’s not a coincidence…

What do you mean when you say "democratized investing" ? That people can get benefits from the stock markets? Or that investment/economic decisions van be made democratically? Index funds rely on the the folks making the index to determine which stocks get bought -- who's on the s&P 500 is not a democratic process

No, the contents of an index fund like SPY are determined by the prevailing market conditions. You're confusing index funds with actively managed funds. The market is a weighted voting machine so index funds are at least somewhat democratic.

Re: Robinhood S-1 IPO

#356

Post by porb121 »

stouset wrote: post #331
porb121 wrote: post #235

Earlier quoted context omitted.

You are literally required to get better fill prices than the market with PFOF. You aren't being played any more than if you just send a normal limit order to the market

Why—exactly—do you reason that someone is willing to pay $109 per user per year for their order flow? Put another way, Robinhood’s actual customers are confident that they are able to extract in excess of $109 in value each year they purchase the flow of orders from a given Robinhood user. From where and/or from whom do you suppose this money is being extracted?

> Why—exactly—do you reason that someone is willing to pay $109 per user per year for their order flow?

Adverse selection is scary and knowing your counterparty is worth a lot. This is not as sinister as you're making it out to be.

Re: Robinhood S-1 IPO

#357

Post by trompetenaccoun »

gruez wrote: post #317
lanbanger wrote: post #314

Earlier quoted context omitted.

Short...right?

No, the parent poster is remarking how gp is willing to jump through so many hoops to reopen his robinhood account, that must mean people really like it. Therefore, its a good company to invest in.

That proves it then, what could go wrong...

On a more serious note the investing and fintech market is incredibly dynamic and competitive. Robinhood is popular because it has big shark backers who successfully convinced many young people that trades are free, even though the cost is just hidden elsewhere. Which more and more slowly come to realize. The whole brokerage market has the potential to be shaken up badly by decentralized exchanges. I'd not invest in something like this now and it's unclear why they would need the money anyway. They're cashing out.

Re: Robinhood S-1 IPO

#358

Post by twobitshifter »

benmanns wrote: post #310
twobitshifter wrote: post #268

Earlier quoted context omitted.

That’s not true. Fidelity does not receive pfof.

Their 606 disclosure does have PFOF https://clearingcustody.fidelity.com/app/proxy/content?liter...

First I’ve heard that. I looked it up and this is for options not equity. https://www.spglobal.com/marketintelligence/en/news-insights...

Re: Robinhood S-1 IPO

#359

Post by relix »

stouset wrote: post #331
porb121 wrote: post #235

Earlier quoted context omitted.

You are literally required to get better fill prices than the market with PFOF. You aren't being played any more than if you just send a normal limit order to the market

Why—exactly—do you reason that someone is willing to pay $109 per user per year for their order flow? Put another way, Robinhood’s actual customers are confident that they are able to extract in excess of $109 in value each year they purchase the flow of orders from a given Robinhood user. From where and/or from whom do you suppose this money is being extracted?

Robinhood users are unsophisticated (= to put it another way: "idiots" who don't have advanced data to inform their trades). This means taking the other side of their transactions is more likely to be profitable than taking the other side of orders coming from, for example, RenTech. Knowing that an order comes from RH (or in other words, not from sophisticated traders) means it's more likely to be profitable for the market maker to fill it. This difference in EV is worth more than $109 to the customers.

It's essentially a "first dibs" approach to fulfilling a transaction. By law it's required to fill at the best price available, so there's no difference in price, and it may even fill quicker if it's in between the bid/asks because of the reason explained above.

Re: Robinhood S-1 IPO

#360

Post by adam_arthur »

rfd4sgmk8u wrote: post #283
adam_arthur wrote: post #233

Earlier quoted context omitted.

The biggest broker in the world? I use both Robinhood and Schwab, and the Robinhood app is absolutely terrible. The visual aesthetic is nice, but usability is awful... I don't really understand the hype. For example they have no dedicated orders screen to cancel limit order that I can tell. There's an "inbox" where your limit order will show up after some delay. I placed an order once and decided to cancel it, but th…

Totally agree, I have multiple brokerage accounts and RH is the least feature rich. RH was my first, but I understood its limitations early. It did also allow free trades which was unbelievable at the time. It is the easiest to use and most approachable broker for new people, young people. The UI is kinda genius, really, for what it is. Most people will stop at RH, the idea of a complex brokerage account is beyond th…

Definitely the concept is great! However it can be done so much better.

I only used the app for a few weeks and encountered so many problems. I'm even surprised people tout their UI as a pro. The visual flair/theme is nice, but it's quite poor from a UX perspective.

Sidenote, I don't get why brokers don't offer a monthly payment to avoid having your order flow sold/provide better fills. Lots would take up on that

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